Record Keeping and Retention

Record Keeping Obligations

Every taxable person must maintain proper records for VAT compliance.

What Must Be Kept

1. Tax invoices issued and received
2. Credit notes and debit notes issued and received
3. Records of all supplies and imports
4. Records of goods disposed of or used personally (deemed supplies)
5. Daily revenue records (including zero-rated and exempt)
6. Purchase records for which input tax was claimed
7. Import/export documents (customs declarations)
8. Accounting records (general ledger, trial balance, financial statements)
9. Contracts and agreements relevant to supplies
10. Tax return copies and FTA correspondence

Retention Periods

• General records: 5 years from the end of the tax period
• Real estate records: 15 years from the end of the tax period

Format

• Electronic or physical: Both are acceptable
• Language: Arabic or English; the FTA may request a translation if records are in another language
• Accessibility: Must be available upon FTA request

Accounting System Requirements

• Must distinguish between standard-rated, zero-rated, and exempt supplies
• Must record all input tax claims with supporting invoices
• Must allow reconciliation between accounting records and VAT returns
• Must be capable of generating FTA audit reports

Consequences of Non-Compliance

• Denied input tax claims: Without supporting invoices, input tax recovery is refused
• Administrative penalties: AED 2,500 (first), AED 5,000 (repeated)
• Extended FTA audits: Poor records lead to longer, deeper investigations
• Difficulty with voluntary disclosures: Cannot correct errors without proper records